Values-Based Product Innovation – The Case of Tata Nano

Abstract

The role of values and changing values in innovation is not yet well understood. The case of the Tata Nano allows elaborating upon the potentials and risks of values-based innovation through a longitudinal analysis of three stages process: 1) Development guided by the top management vision of safe and affordable mobility for Indian "scooter families", 2) market entry suffering from a mismatch between customer values, value proposition and marketing measures, and 3) market penetration based on repositioning the product as a smart, modern city car for young achievers. Reconstructing the case helps us to further differentiate the values-based innovation framework, and to understand the impact of diverse stakeholder values on product innovation success. Lessons learned emphasize the need to actively manage stakeholder values, and to make every business model component fit not only to one another, but also to stakeholder values and to the purpose of the whole endeavour.

Keywords: values-based innovation management; frugal innovation; stakeholder values, product innovation, innovation marketing, business models, automobile industry, case study

JEL Classification: M14, O31, O32, L26, O33