With the current economic climate fast eroding competitive advantages, the Tatas have decided to double down on design and innovation, with the group deciding to continue on a higher R&D spend in the coming years.
“As a group we are clear, as our group Chairman Cyrus Mistry has pointed out, that in an increasingly competitive environment, we must differentiate ourselves through a culture designed around customer centricity and innovation and hence the importance of design,” said Mukund Rajan, Brand Custodian, Tata Group, while addressing a media round table, titled Design@Tata, here on Thursday.
Four Tata companies — Titan Company, Tata Technologies, Tata Global Beverages and Tata Elxsi — participated in the roundtable and top officials shared their experiences on how design-driven innovation had helped them build sustainable competitive advantage.
To have an edge over its competitors and to have the first mover advantage, the Tata Group has been spending heavily on design innovation and is committed to spending more.
In 2012-13 the Tata group spent Rs.13,223 crore ($2.43 billion) on R&D. “This is roughly two and a half per cent of our total turnover. This number in rupee terms constituted a growth of 22.5 per cent over the previous financial year.” Dr. Rajan said.
Speaking on the benefit of design and innovation, Nick Albert, Global Design Head, Tata Elxsi, said that every one per cent intelligently spent on good design could yield a 3-5 per cent increase in revenues and profits for a company.
He said his company, apart from catering to the requirement of the Tata group, had been helping clients outside to excel in the market.
Revathi Kant, General Manager, Titan Company, shared her experience how a team of 70 in-house designers were fuelling demand for the company’s products through user-centric design. She gave an example of a new branded jewellery range, Mia, specially targeted at working women. The Mia range was created with contemporary design in light weight 14 carat gold to make them affordable. Mia became a success instantly, and in one year, it generated a business of over Rs.200 crore. Tata Technologies, with 6,500 people, is a service company offering designs and solutions to clients in 25 countries in the area of automobiles, aerospace and the machinery segment.
Gopinath Jairaj, President, Global Delivery, Tata Technologies, said the company had been deploying engineering and technology in designs to convert consumer insights into class-defining products.
Sushant Dash, Global Brands Director, Tata Global Beverages, said innovative packaging had been helping his company to enter into new markets and create demand for the products. In 1985, Tata Tea was the first to introduce poly packs and the innovation continued till today.
