Benefits of Cost reduction

In the emerging Asian markets, inflation is on the peak and pay check of middle class people are not raising too much to cope with the increased rate of inflation.

They are therefore, spending money to manage their low cost budget and prefer to choose the balanced blend of cost and quality. The more competitive products with a perfect balance of cost and quality, captures the almost 70% market share.

The only way out to survival is to stay cost competitive.

To control the price of the product

The sale is totally dependent on the value of the product offered against the designated price, which is the main reason of price war at market place.

For example, today you would not be able to decide which SUV car to buy in an Indian market due to plenty of options available in the same price range. It is only competition which forces to control the price against the value offered.

To gain the competitive edge in the market

The old auto maker in India is making tie ups with the world top leaders, to capture the market share.

For instance, the Tata motor has gained the competitive edge in the market by launching series of cars in each segment with 5 star Ncap ratings. Which is the main reason to gain competitive edge in the market and leaving behind the giant Maruti Suzuki.

To increase the profit margin

The sales will create leverage, low margin with high volumes of sales create more profit margin and serves value against the price to the customers. In turns makes both, organization and customers happy.

To launch the variants

Tata motors has launched a series of cars covering low to high end variants, covering the 70% market share, which have forced the competition to lower their profit margins and offer value against the price.

Nowadays, competitors such as Suzuki, MG, Kia, huydai are forced to launch lower priced products, offering higher value against the price.

Performance improvement

Competition is the driving force, to continues performance improvement in the market.

For instance, Tata motors have launched vehicles with 5 star Ncap safety ratings in India. Acts as eye opener for the whole competition.

It becomes innovation, if timely protected

Tesla is the Giant automaker in EV segments, with millions of small patents preventing the competition to getting in, therefore creating monopoly based on the timely protected ideas.

Roadmap to the future new launches

The protected ideas of today becomes the path and roadmap to the upcoming innovations for the future products.

The firstly launched 5 star safety rated vehicle by Tata motors becomes road map to its own models as well as for the competition.

Improved brand image

The sales and brand building create Name and fame to build the concrete foundations of the business.

For instance, After take over of Jaguar Land rover, the Tata has improved its Brand value.

Robust research and development

Once you have launched the cutting edge technology, it will boost your research and development capabilities. Employee with high talents add up in the queue to join you, once you have a bigger brand value.

Open up the new world of opportunities

Success in launching new technologies will boost your confidence to the next level.

For example, Tesla has created a unique market share in Ev segment opens up new possibilities in Space ex. Which is a totally different and next level business.