Tata Motors Hbr Case Profitability of the Nano Essay Example

Tata Motors Hbr Case Profitability of the Nano Essay Memorandum To Chairman, Tata Motors Ltd Issue Profitable Production of the Nano Issues A primary issue Tata must consider is the current and future profitability of the Nano. In order to determine if their strategy of entering the small car market is feasible, the influences on the industry must be evaluated. If evaluation of the industry indicates that future profitability is in question, the company must consider canceling the project, or focus on areas where Tata can influence the industry to improve the likelihood of profitability. Analysis Profitability/Feasibility One must consider the sensitivity to prices and the affordability of the car to the primary target market (India). Case Exhibit 3 estimates that 21% of households have income levels high enough to be considered part of the target market (ie: families that may own a motorcycle or small car), with almost all (98%) residing in the $4000-$10000 income bracket. Even at low gros margins, the Nano would be 22% of household income for those families that make $10000 annual income. Although 40 million households are estimated to be in the $4K $10K income bracket, it can be expected that a small number of these will be earning $10,000. Therefore, the target market can be considered greatly reduced, and their price sensitivities very high. However, as discussed, it can be assumed that these households already have a motorcycle, and approx 2 million could switch to a cheap car. In the analysis of Case Exhibit 6 there is no reference to Labour or SGA costs for the Nano. We will write a custom essay sample on Tata Motors Hbr Case Profitability of the Nano specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Tata Motors Hbr Case Profitability of the Nano specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Tata Motors Hbr Case Profitability of the Nano specifically for you FOR ONLY $16.38 $13.9/page Hire Writer When these are estimated (general and admin costs assumed to be negligible due to Tata’s current operations of vehicle production), the cost of the Nano rises to a point where $2200 (USD) per unit price will not be profitable. If the 24% Post Manufacturing Tax remains (p. 18), a promotional budget is included (assumed to be 20% of per-unit sales up to first 250,000 units), and labour cost/unit is included (Appendix Exhibit 1), the sale price of the Nano must rise to approximately $2600USD (Appendix Exhibit 2). Also, current profitability is a poor indicator for future profitability. A rise in raw material price will mean a rise in price of supplies (eg: steel). The already near-zero profit margins will diminish without an increase in selling price. Industry/Strategy Tata is entering a new market, and a careful analysis of the competitive forces in India must be carried out (see Appendix Exhibit 3 – Porter’s Five Forces). Considering rivalry, Tata is the leader on price. This gives them a very important competitive advantage in a highly price-sensitive market. Although market share has large potential for increasing, the threat of new entrants increases the rivalry over the coming years. The advantage for Tata lies in sourcing low-cost inputs through a unique supply chain. The supply chain is supported by inputs from suppliers in close proximity to the Tata facility, and is characterized by a high number of suppliers competing with one another for the Tata business. There are many input substitutes available with a relatively low purchasing cost. This places Tata in a strong position over suppliers and allows them to manufacture cars at a low cost. The competitive force of the buyer can be considered low for the Indian market. Since the Nano will be the cheapest car available, it may be the only option for many car buyers and there will be few substitutes available until foreign competitors can establish a similar low-cost structure. The buyer gains leverage with very high price sensitivity, essentially in the form of affordability. The barriers to entry are in favour of Tata. They can realize economies of scale in terms of increasing their capacity for vehicle production, their efforts in promotion, labour and material inputs, and distribution facilities. These will be difficult barriers to overcome for new entrants, and high (or increasing) average costs may keep competitors from entering. The government taxation policy also serves as a barrier to profitability for manufacturers. A high threat of substitutes will be a competitive force against Tata, as consumers opt for the popular and cheaper options of motorcycles or public transit. In terms of car substitutes, however, Tata has the advantage of lowest cost. Ethical Considerations An ethical consideration is whether Tata’s values are in the right place and, if so, are they truthful? The Chairman proclaims the Nano is â€Å"the people’s car†. However, will an increase in cars really have a positive effect on the productivity and quality of life of the average Indian? Despite the Nano’s low emissions, pollution will increase with a dramatic increase in cars. Also, congestion will have a negative impact on urban centres, and the quality of the car is not suitable for rural roads. If the Chairman’s values really are with the interests of the people, the resources for the Nano could be redirected to efforts in improving infrastructure and mass transit systems. Recommendations Based on the assessment of current and future profitability, I am recommending Tata move forward with production, but maintain as narrow a margin as possible to establish early market penetration and brand equity. The goal of $2200USD selling price is unprofitable and unrealistic. Even at the selling prices described in Appendix Table 2, Tata will still be the leader in cost competitiveness. They should therefore implement a higher selling price. As was described in the competitive forces model, Tata must retain its â€Å"First Mover† position. To accomplish this, Tata needs to continue to keep their suppliers in a technology development and low-cost race, and ensure an increase in car manufacturers does not provide the suppliers with greater competitive force. Finally, international market share is a requirement, as the Indian market will quickly become diluted. Tata can distribute in their currently occupied markets of Southern and Eastern Europe, and can also use this opportunity to raise prices to increase margins to cover the narrow margins in India. Before Tata can establish itself in other developing countries, the profitability of the business model must first be proven in its home country. Word Count: 1012 Exhibit 1 |Labour Costs / Car | |Cars per year |250000 | |Number of Employees |2000 | |Employees as Percentage of Cars Produced |0. % | |Average Employee Salary | $5,500. 00 | |cars / employee / year |125 | |Labour Costs / Car | $44 | Exhibit 2 Nano Costs (adapted from Case Exhibit 6 Making the Nano)-in USD |24% Post Man Tax |16% Post Man Tax | |(INR:USD=45:1) | | | |Total Parts / Supplies | $1,477 | $1,477 | |Labour / Car |$44 |$44 | |Post Manufacturing Tax | $533 | $355 | |Sales Tax $89 | $89 | |Total Variable Cost per Unit | $2,144 | $1,965 | |SGA / Car (20% of Costs per Unit) | $429 | $429 | |Total Unit Cost | $2,572 | $2,394 | |Selling Price (Gros Margin Target 5. 5%) | $2,714 | $2,526 | |Selling Price (Gros Margin Target 2. 5%) | $2,637 | $2,454 | Exhibit 3 [pic]

A Quiz About Compressing Accordion Sentences

A Quiz About Compressing Accordion Sentences A Quiz About Compressing Accordion Sentences A Quiz About Compressing Accordion Sentences By Mark Nichol Brisk, lively writing requires attending to phrasing that slows readers down and or trips them up. Be vigilant about finding ways to make sentences less wordy and more direct. Firm up these five flabby sentences, and compare your revisions with mine: 1. â€Å"The kit includes a set of five food containers, and they are dishwasher safe.† Insert the key information in the second clause of this sentence as a phrasal adjective preceding the subject: â€Å"The kit includes a set of five dishwasher-safe food containers.† 2. â€Å"In 1995, he published a book called Bowling Alone, which introduced the term ‘social capital’ into our nation’s vocabulary.† Shift the focus from the author’s act of publishing the book to the result of the publication by deleting compacting the phrase â€Å"he published a book called† to â€Å"his book,† then delete the comma and which: â€Å"In 1995, his book Bowling Alone introduced the term ‘social capital’ into our nation’s vocabulary.† (Use this solution cautiously, as such a shift in focus may cause the passage to veer from fidelity to the author’s intent.) 3. â€Å"The film was commissioned by the US Treasury Department, and it was troubled from the beginning.† When a sentence includes more than one form of the verb phrase â€Å"to be† is, was, were, and the like discover a way to eliminate at least one of them; in this case, alter what follows was in the first clause to a subordinate clause, and jettison the conjunction: â€Å"The film, commissioned by the U.S. Treasury Department, was troubled from the beginning.† (Look for opportunities in such cases to replace not one but both â€Å"to be† verbs, which are inferior in impact to more vivid verbs doing so may encourage you to be more specific, too: â€Å"The film, commissioned by the U.S. Treasury Department, suffered from bureaucratic interference from the beginning.†) 4. â€Å"Smith is president of the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and frequently represents evangelicals in the media.† This sentence is improved in the same fashion as the previous one, with the additional improvement of replacing the verbose â€Å"part of the whole† construction with a â€Å"whole’s part† revision: â€Å"Smith, president of the Southern Baptist Convention’s Ethics and Religious Liberty Commission, frequently represents evangelicals in the media.† (Take care, however, that this more concentrated restructuring is not more ponderous than the original phrasing.) 5. â€Å"My cousin, who is employed as an epidemiologist at the Centers for Disease Control and Prevention, claims that a scenario similar to that one could occur if the circumstances were right.† Delete the redundant indicators that the writer’s cousin is a person (who) and is employed at the place of employment, and tighten the rest of the sentence by converting phrases that contain an adjective and follow a noun into adjectives preceding the nouns and modifying them on their own: â€Å"My cousin, an epidemiologist at the Centers for Disease Control and Prevention, claims that a similar scenario could occur under the right circumstances.† Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Grammar category, check our popular posts, or choose a related post below:50 Handy Expressions About HandsHow to Pronounce MobileAdverbs and Hyphens

Determine whether ethnocentrism or ethical relativism apply for Essay

Determine whether ethnocentrism or ethical relativism apply for specific cross-cultural business circumstances - Essay Example Therefore, business leaders and executives should critically evaluate their business circumstances, especially for those involving specific cross-cultural situations, in order to avoid applying ethnocentrism, which may jeopardize the business transactions. For instance, one of the parties to the business contract may pull away if he or she feels considered as a junior partner to the contract due to his or her culture or religion (Egger, 2008). Ethical relativism is a similar practice to ethnocentrism whereby an individual tends to make ethical choices basing on what he or she feels is reasonable or right in accordance with an individual’s own value system or belief. Globalization intensified the interaction of different cultures across the world. This demands that business leaders as well as executives apply considerable accommodation to new cultures and beliefs whenever dealing with cross-cultural business transactions to avoid offending the other party to the contract or bus iness deal. In most circumstances, business leaders use language barriers as a basis to judge other cultures, e.g. the fact that English is the international language in the world does not mean that those who do not know the language do not have anything valuable to offer. Therefore, it is necessary to apply considerable accommodation to such cultural differences in order to foster understanding, e.g. hiring an interpreter to mediate between them during a business transaction (Guffey, Rhodes & Rogin, 2008). International business ethics refers to the standardized cord of ethics or norms that guides the conduct of transacting businesses in an international field. Due to the conflicting provisions of cultures as well as religions across the world, business have to adhere to the set cord of ethics while doing international business in order to facilitate smooth transaction across various cultures. Furthermore, international business ethics enables the companies as well as their represe ntatives and agents to stay above ethnocentrism or ethical relativism. However, global leaders as well as guardians of international trade such as the United Nations have a stipulated set of recognized norms that businesses have to abide to, such as the UN Global Impact. This provision enables businesses to engage professionally when confronted with cross cultural business circumstances as well as maintain cordial business relations with their partners (Jhingran, 2001). Some of the common aspects of international business ethics include: Environment friendly technologies Eradicating corruption, extortion, and bribery Promote environmental responsibility. Eliminate employment discrimination. Eliminate forced and compulsory labor. Eradicate child labor and slavery. Foster international cooperation. Despite the need to conform to international business ethics, there are situations that require business executives as well as marketing professionals to apply local culture when determinin g their ethical practices. This is especially in cases where the business transaction has a lot more sentimental value as compared to its commercial value. Take for instance in a business transaction that involves dealing with antiques and traditional artifacts such as monuments, curving, drawings and idols. These artifacts have a certain protocol of handling them, failure to which it may cast an evil

A Critical Role in Deterring Smoking Both in the US and in the UK Research Paper

A Critical Role in Deterring Smoking Both in the US and in the UK - Research Paper Example Particularly, according to statistical data, the number of adult smokers in the U.K went down by approximately one million between 2006 and 2007 (Easton, 2009). However, contrary to this observation, the number of heavy smokers has increased to 29% from 24% during the same period and those who planned to quit reduced by approximately 5% from 72% (Easton, 2009). The fall represents an estimated 1.2 million people. The U.K also required the manufacturers to print health warnings on the cigarette packs in an attempt to deter people from smoking. According to the most recent statistics, the U.K has 22% and 19% male and female smokers respectively. Although the U.K has approximately 10 million smokers, there are 15 million ex-smokers indicating that the ban has been effective (Smoking Statistics, 2013). Nevertheless, the U.K has been receiving some troubling news concerning the number of children starting smoking, which stood at 200,000 annually (Cancer Research UK, 2013). On the other ha nd, the U.S has more smokers than the U.K. According to a 2012 statistic, the U.S has at least 42 million smokers, which represents 18.1% of the overall population (Centers for Disease Control and Prevention, 2014a, p. 30-32). This number comprises of adults alone or individuals with at least 18 years of age. Of the overall U.S smokers, 78% were heavy smokers. According to race, the American Indians led the smokers with 21% and the behaviour is more common among the males than females with males taking on almost 21% while females represent 15.8%.

Personal statement Essay Example for Free

Personal statement Essay My names David, and just like my entire society of Jews, I have been neglected from the German nation. I have found no reasoning, no explanation, for why we been blamed for our countries extreme downfall. For the last two years our family has been in hiding and three months ago we were located and persecuted by the Nazis. The neighbors gather information and noticed we were Jewish, they quickly called the police. Weve received letters from our relatives stating their safe in a labor camp but I know they are probably not even alive anymore. Ive kept updated with the militaries action and they invaded Poland 39 as well. I feel an entire war begging and the help for our race is no where near. This Genocide is no where near over. We were stuffed into train crafts, over crowed without any space to sit. We had a bucket as a toilet for about 35 people. I felt the presence of evil from the begging, and even though I know were heading to Auschwitz I dont have any predictions for my future. As soon as we stepped off the train we were separated into two groups. To me the groups were workers and the other were the useless. I havent seen my mother or baby sister nor my grandmother. Me and my father escaped and are once again in hiding. We tried locating our family but we cant find anyone from the other group, but have seen bodies being disposed and the crematoria. I havent slept but Ive cried, consistently. As well as my father were torn down we understand what is going and are hopeless. I know the year, 1943. But not the day nor month. Help? I don’t expect it, not after 4 years not anytime soon especially not America who didn’t even allow the St. Louis ship to stop in the beginning. The only reason I believe this is because they have no idea what is going on. If they did they would evidently stop this epidemic and come rescue us. Me and my father have been living hopeless and have not expected anything to change but were safely hiding. Today we saw American soldiers invaded the labor camp and I have no idea what my future holds. Hopefully we can relocate to Israel which is under British control or united states. I just want for everything to go back to normal but the will never happen, especially since my family has been destroyed. The Allies soldiers are helping as much as possible and feel more sorrow then any other person, They will never fully understand what we went through. The world has come to a complete change, they understand that the isolation only brought destruction to entire world and the only way to keep peace is too come to a united world. I don’t feel the same, never will. My mentality has developed, I avoid eye contact with everyone, I hate speaking of the experiences but I most in order to let society know what has really happened.

opium war Essay -- essays research papers fc

The Opium War was a war fought by two countries Great Britain and china in 1839. The war was fought over the drug opium which was used by the Chinese for hundreds of year to relieve pain. opium is a habit forming narcotic made from the poppy plant. In the late 1700’s the British was smuggling the drug into China for non-medical use. The navies of the two countries mostly fought the battles of the opium war at sea. Within three years the Chinese’s old ships were simply no matches for the brand new British ships. In 1843 the Chinese and the British signed the treaty of Nanjing. This treaty gave the British the island of Hong Kong. In 1844 the United States of America and other countries gained extraterritorial rights. Which this allowed other countries to trade in china and not live b...

Argumentative Essay On Social Media

Nowadays, a lot of people are using social media such as Facebook, Twitter, Tumbler and so on. Since the Internet has propagated rapidly, social media have progressed a lot. The generalization of the internet makes us to live conveniently and fast. People are almost using smart phones, i-phones or comfortable devices which can access to internet. These equipments make us to do social network easily. It helps contact friends, family, and other people even though they live far away. It could be, however, abused, if you don’t use properly.Especially, it is important that we understand and regulate the use of social media by young children. First of all, social media, especially facebook, are very addicted. People would say drug or alcohol is more addicted than social media or social media addiction is not big problems, but it is not true. There is a report of the social media addiction by University of Chicago’s Booth School of Business. A team from the University of Chica go’s Booth School of Business recently conducted an experiment involving 205 people in Wurtzburg, Germany to analyze the addictive properties of social media and other vices.Participants in the week-long study were polled via BlackBerry smart phones seven times per day and asked to report when they experienced a desire within the past 30 minutes, and whether or not the succumbed to that desire. They were also asked to gauge each desire on a scale from mild to â€Å"irresistible. † In the light of these facts, surely social media make addicts, and it is hard to escape. The problem is most people who have an addiction to social media and don’t even realize it. Second, people can get mental and physical disorders easily through using social media.People might bet think social media is not matter with the disorders. They argued the social media is good for mental diseases because social media help express their feelings or thought easily. Also, through social media, they can be connected each other more. However, social media just offer limited meeting. They just meet on websites, not physical meeting. Psychologist, Aric Sigman suggests â€Å"The use of social networking sites as opposed to face-to-face interaction could lead to major health problems. † Also he claimed in the British Journal The Biologistâ€Å"Spending too much time online could lead to social isolation, loneliness and a negative outlook. These types of psychological symptoms could eventually lead to more serious health concerns, such as heart disease, cancer and dementia. † Using social media disturbs make deep relationship with others. When they are using social media we do not need to move a lot. It is okay just to stay. We do not need to active a lot. As a result, it leads naturally mental and physical disorders. Third, social media doesn’t help for their studies or talents.People think social media is good places to show their talents or works what th ey did. For example, they argue people can share video clip what they playing the instruments or dancing or singing. It is, however, for people who already good to do those. If you are not good at those things and if you spend time to do social media, it would be hard to progress your talents. I did surveys about relationships between using social media and studying last semester. Most students answered using social media is not helpful to study.Also, students who got good grades spend just a little time to use social media. Using social media steals your time to what really want to do easily. If you do not pay attention, your time is gone very fast, and it cannot be returned. If you read books, study, exercising, practice singing, dancing or playing the instruments instead of using social media, it would be much better for you and your future life. Especially, the young generation and children are easy to be exposed to environments which using social media.Social media are favorite not only along with teens or youngsters; it’s growing among working people and also old people. Social media addiction drug exactly where everyone is continuously logged on it irrespective that they have worked or they don’t have anything to complete. It’s regarded Social media an addiction exactly where many people have become addicts every day. It could be occurred mental and physical disease and make you waste time. Those are why we need to understand and regulate the use of social media by young children.