Taking Mobility Down the Pyramid: The Strategic Trajectory of Tata Motors

Abstract:

An approach to strategy called “Blue Ocean Strategy” is the subject of keen discussion in both academic and practioner circles. The salient features of a blue ocean strategy are that it renders competition irrelevant, is based on value innovation and opens up vast uncontested market spaces. Its protagonists, W.C.Kim and Renee Mauborgne, have adduced evidence to show that blue ocean strategies have inplicitly been followed for ages by firms in different industries, including the auto industry. The indian company Tata Motors (formerly called TELCO), originally a truck manufacturer, diversified into the production of passenger cars around the turn of the century. We examine the strategic moves and value innovating activities of this player and attempt to show that Tata Motors’ strategic trajectory conforms to a large extent to the blue ocean strategic type. As is characteristic of all blue ocean strategies, this trajectory, which goes beyond short term profit maximisation, has the potential to ensure sustainable growth in the mobility of people on the one hand and of the firm on the other. We also examine in this paper, the hurdles that Tata Motors had to face in implementing its blue ocean strategy arising out of a hostile institutional environment and adduce important lessons with regard to the responsibility of Government and civil society for creating a conducive institutional environment for blue ocean straegies to succeed , especially in a developing country.